Hospitals pay big for uncompensated care

Magaly Olivero Conn. Health I-Team Writer

Published 7:27 pm, Tuesday, December 10, 2013

Undocumented immigrants are expected to make up a larger share of Connecticut's uninsured population next year, which health experts predict will put new financial pressures on safety-net hospitals that provide emergency care to everyone.

The sweeping health care reform legislation known as the Affordable Care Act, or Obamacare, provides coverage options for legal immigrants, but those in the U.S. illegally cannot apply for Medicaid, even if they are poor.

Nor can they buy coverage at Access Health CT, the state's new insurance marketplace, even if they have cash. That means illegal residents without coverage will continue turning to local emergency departments for care at a time when Connecticut hospitals face the loss of millions of dollars in federal and state subsidies to help defray the cost of uncompensated care.

"There is a misperception that everyone will be covered by the law," Andrea Rynn, director of public and government relations for Western Connecticut Health Network. "It's our hope that most people will be covered. But we also recognize that we have a high population of undocumented (residents) who are uninsured in our region. It's a real issue for our community."

Shredding the safety net?

The dilemma of the undocumented sheds light on the uncertain future of the so-called safety-net hospitals in Connecticut and the nation as health care reform unfolds.

Often located in urban areas, safety-net hospitals treat a disproportionate number of low-income, uninsured, and otherwise vulnerable populations, including undocumented residents. Federal law requires hospitals to provide emergency care, regardless of a patient's ability to pay or immigration status.

In 2012, Connecticut hospitals spent $233.6 million in uncompensated care, including charity care and bad debt, according to the state Office of Health Care Access.

"This is a global problem that isn't going away," said William Gedge, a senior vice president for Yale-New Haven Health System, the state's largest provider of uncompensated care. "This population (of undocumented residents) is not being addressed by any state or federal initiatives. It's operating under the radar screen."

In the middle were such facilities as Danbury Hospital, which spent $14.3 million on uncompensated care, and New Milford Hospital, which spent $1.8 million on such care in fiscal 2012.

Hospital officials expect the budget gaps to widen in 2014 when the health law begins to sharply reduce government subsidies known as disproportionate share hospital payments on the assumption that more people will be covered by Medicaid or private insurance due to reform.

Connecticut hospitals also face a $550 million cut in state funds that previously covered Medicaid expenses.

So far, budget cuts have had a "fairly large impact" on hospitals, leading to layoffs and cutbacks on new hires, patient services, research and technology said Stephen Frayne, senior vice president for health policy at the Connecticut Hospital Association.

"Hospitals face the challenge of somehow absorbing theses cuts, while providing top quality care," he said. Ensuring that Medicaid is adequately funded under the program's expansion effective Jan. 1 is another concern, he said.

Connecticut hospitals spent $504.2 million in 2012 to cover Medicaid reimbursement shortfalls, the first time the amount exceeds half a billion dollars, reports CHA.

A study from the UCLA Center for Health Policy Research and The Commonwealth Fund warns that safety-net hospitals in states with large concentrations of undocumented residents "will be particularly affected by the reduction in disproportionate share hospital payments scheduled under the Affordable Care Act that have previously cushioned the impact of providing uncompensated care." Excluding undocumented residents "from coverage under the law will create new financial pressures on safety-net hospitals."

Melting pot

Connecticut's diverse immigrant community comes from many parts of the world, including South America, Mexico, Central America, the Caribbean, Asia, Europe and Africa.

Many are here legally, but an estimated 55,000 to 100,000 are undocumented. An exact count is difficult because they are not part of the census and many hide their immigration status.

Leticia Colon, outreach public relations coordinator for Optimus Health Care, worries that hospital budget cuts will leave uninsured patients, including undocumented immigrants, with limited access to the specialized expertise and services only found at hospitals.

Optimus Health Care operates federally funded health clinics in Bridgeport, Stamford and Stratford that serve special populations, including the uninsured, underinsured and undocumented.

Traveling the globe to reach Connecticut

In extreme cases, undocumented immigrants travel thousands of miles from their native country, intent on seeking medical care at an emergency department in the United States.

"We've tracked many uninsured patients who literally flew into JFK and within 48 hours were in one of our emergency departments," Gedge said.

Other undocumented immigrants require care while passing through Connecticut such as the patient who experienced a brain aneurism while visiting a local casino. He spent a year at Yale-New Haven Hospital at a cost of about $5 million before being medically transferred to Beijing, at hospital expense.

"One of our major sources of undocumented residents are the casinos," Gedge said. "These individuals have no family. No money. No identification. The only thing they have is a wampum card."

For now, experts expect little change in the near future for undocumented immigrants. Stalled plans to overhaul immigration do not address health insurance and the odds of lawmakers changing the federal law to include unauthorized immigrants are slim.

"I don't see any solutions in the horizon," Gedge said. "It's going to get worse."